Poll: Small-business owners fear economic situation

Most small businesses that aren’t hiring say they don’t want to bring on new employees at this time because of concerns about the economy, as well as fears about the cost of health care, according to a new poll Wednesday.

Seventy-one percent of those surveyed said revenues/sales wouldn’t justify hiring additional workers, while 66 percent expressed worries about the overall economic situation, Gallup found. Seventy-six percent of small businesses said they simply don’t need any more workers at this time.

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Gallup said that 85 percent of the small businesses survyed indicated that they are currently not looking for new workers.

Meanwhile, 48 percent of those not hiring said it was due to concerns about possible rising health care costs, while 46 percent said they were worried about new government regulations.

“The debate over why U.S. small-business owners aren’t hiring more aggressively tends to hinge on whether overall business conditions, including a lack of growth and revenue, are the primary culprit as opposed to the potential cost of healthcare and government regulations. Apparently, both sides of the debate are correct,” Gallup said.

Almost one in four small-business owners who are currently not expanding their workforce, 24 percent, said they are holding back from hiring because they are worried about no longer being in business in 12 months.

And while 65 percent of small-business owners said they have as many employees as they need, 29 percent said they have fewer workers than needed.

The Gallup Poll was conducted Jan. 9-13 among 600 small-business owners and has a margin of error of plus or minus 4 percentage points.

CLARIFICATION: An earlier version of this story said health care costs and government regulations were the reasons small businesses were not hiring; the current version reflects the Gallup poll finding the economic factors are even more important reasons for the lack of hiring.

Readers' Comments (24)

And the Politico is just figuring this out? F..... genius. Oh by the way, the architect of Obozocare just came out and stated that everyone's premiums will increase by as much as 30%. Yep, the Kenyan Klown lied again.

I run a small business - have for 37 years. I get e-mails almost daily, guys looking for summer work. I have to say, "No. Prospects are poor"

Margins are tighter now then at any time since I started. Prices have to be dropped to get work. Associated costs to employ someone in construction run about 40 cents on the dollar in Wisc ... And that's without health care.

More government mandates and regulations arrive almost monthly. I used to do all my own accounting and tax work -it's too complex and time consuming now. Risk vs reward is a calculation - non production government mandates, taxes, and regulations have tipped that scale.

Some companies are are hiring illegals: no worker's comp, no unemployment comp, no FICA match, no paperwork . There is zero enforcement on this.

This article is irritating, since it highlights the 5th and 6th most important reason for not hiring. What are the first two? 1) Don't need more employees at this time, and 2) Sales and Revenues don't justify hiring. I guarentee you that if the business is there to get done, businesses will hire employees to do it. Stop manufacturing controversy where there is none.

I think the71% that worry about demand and the 53% about cash flow are real business concerns. I am not aware of new regulations. I certainly have none on my small business. I already pay health care and I will be getting a tax break in 2014 for doing so.

A lot of the businesses that are surveyed simply are not IN business. We are doing great! We have always help our employees! So, there is nothing new here for us to worry about. We go out and take care of business.

And you bozos think that things will get better if we repeal Obamacare? Give me a break. Things will only get worse. Much worse. What are the republicans proposals for health care? Let me tell what they are. Repeal Obamacare. That's all they got. No wonder the republicans are crashing and burning in the polls. The public is finally seeing their true colors. All they've done is block everything for the past three years and blame everything on the president. The public knows better. It's pretty sickening to watch Mitch McConnel stand up there and say that the president is against religious freedom when 65% of Americans fully support the president's contraception plan. Yeah, go on republicans. You look so desperate and ridiculous. It's coming back to haunt you now isn't it? Just say no is no longer working for you. Yeah, go ahead and get totally in bed with your all white evangelical base. That's a great strategy to lose the election and that is exactly what you are going to do .... LOSE.

What a great Obamacare slander piece by Politico. Nowhere does this article indicate that the main reason most employers are not hiring is because of a lack of demand. Demand truly drives business. To claim that all these other speculative and fear-based problems are the main problems; is pure BS.

This is good justification for the public option. I’m still voting to keep Obamacare, and recent polls suggest others will also. Let’s just see what happens in November. If you follow the news, Republicans have no reason to be popping the champagne corks.

Only about half of small businesses ever offered health insurance--and this predates the health care reform law by years. Blaming the law for a long-standing problem is ridiculous. Lack of demand due the the shrinking middle class is clearly the major barrier to small business hiring, but we have to remember that jobs in that sector tend to pay worse and have few (if any) benefits,

With regard to health care coverage the underlying problem there is that costs have increased at a rate 2 1/2% greater than the growth of the GDP every year for the past half-century. Fixing that problem requires either a make-over for the health care delivery system (as contemplated in the Affordable Care Act) or price controls. There really aren't a lot of other options available.

If you've been polled by Gallup, you know that they are not a credible source. This article and the poll is pure bunk. This is the same type of article that has been running for the last 5 years now. Weak. Sad. Old.

I hate to say it, but regulations on the drilling and coal businesses in Pennsylvania have created over 600 new jobs in my hometown alone. "Small" gas and coal companies are hiring, despite "healthcare costs". Why? There's money in it.

This sounds like more political BS than anything else.What exactly are the regulations that they are afraid of. Stop dumping toxic chemicals in the local river? What about the medical? If they offer it now they would surely include a new employee after 90 days. If they want to disco the medical the aca penalty is a lot cheaper than having to bump employees salary to to retain them so they can buy health insurance on the market. I keep seeing what sounds like a phony argument on this front. Concern about the economy? You got me there, however not beefing up will you give away market share if things come roaring back? What does a small biz owner know about the general economy when gov t economists give conflicting info.

I can understand small businesses being cautious after all they don't have big cushy profit loaded banks accounts to fall back on. The economy is still fragile and there are millions out of work. This all adds up to like others posted "demand".

Until the dust settles and the fat cats starts hiring instead of paying lobbyist and greedy comgress persons these small business owners should be prudent.

Small business owners who have “fears about the cost of health care” should switch to a P-HRA where: (Portable-Healthcare Reimbursement Arrangement).

Employers make defined contributions into employee-owned accounts, eliminates employer hassles or moral conflicts Other family members or part-time employers may contribute into shared family account, more money to purchase healthcare policy Account (policy) belongs to employee, stays with them between jobs, no COBRA Employee selects coverage to meet their needs/beliefs, no one- fits all Employees keep left over funds to pay other medical expenses with a VISA healthcare card

Most small businsess hire people part time and do not offer any benefits. It is cheaper to hire two part time employees than to hire one full time. So this nonsense of not hiring because of Obama care is just that nonsense.

What business entrepreneur is going to pass up a business if there was a strong demand for that product or service because there is some government regulation.

If you have ever done a business plan, one of the first things asked is there a demand for your product or service. Not are there excessive regulations. No demand you will not get any funding. PERIOD.

Just look at Nevada, the highest unemployment rate yet it has the lowest tax rate and the least amount of regulations in the country. Hell even prositution is legal, gambling legal, porno business legal, unlimited speed limit on their rural roads, guns galore,

Demand is the key. Even Henry Ford raised the wages for his employees so that they could afford to buy his products.

LOL at the wingnuts and Politico running with the original false headline about health care and regulation without looking at the actual poll which showed that lack of demand was even more important. Now they're forced to backtrack. Priceless.